Smart Wires Technology Ltd. (STO:GOGRID SDB) Just Reported Full-Year Earnings: Have Analysts Changed Their Mind On The Stock?
It's been a good week for Smart Wires Technology Ltd. (STO:GOGRID SDB) shareholders, because the company has just released its latest yearly results, and the shares gained 9.2% to kr11.44. Revenues were in line with expectations, at US$48m, while statutory losses ballooned to US$1.03 per share. The analyst typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimate to see what could be in store for next year.
Check out our latest analysis for Smart Wires Technology
Taking into account the latest results, the current consensus from Smart Wires Technology's sole analyst is for revenues of US$65.0m in 2022, which would reflect a substantial 37% increase on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 31% to US$0.45. Yet prior to the latest earnings, the analyst had been forecasting revenues of US$65.3m and losses of US$0.38 per share in 2022. So it's pretty clear the analyst has mixed opinions on Smart Wires Technology even after this update; although they reconfirmed their revenue numbers, it came at the cost of a noticeable increase in per-share losses.
The consensus price target held steady at kr30.00, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Smart Wires Technology's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 37% growth on an annualised basis. This is compared to a historical growth rate of 208% over the past year. Compare this to the 29 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 31% per year. So it's pretty clear that, while Smart Wires Technology's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most important thing to take away is that the analyst increased their loss per share estimates for next year. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Smart Wires Technology going out as far as 2024, and you can see them free on our platform here.
Even so, be aware that Smart Wires Technology is showing 2 warning signs in our investment analysis , you should know about...
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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